Briefings

Brazil awards 3,150-mw Santo Antonio

A consortium of Brazilian state and private firms dominated by government-owned utility Furnas Centrais Eletricas S/A won a December 2007 concession auction to build and operate the 3,150-mw Santo Antonio hydroelectric project on Brazil’s Madeira River. Consorcio Madeira Energia outbid two other consortia by agreeing to sell power from the US$5 billion project for about 78.9 reais (US$44.79) per megawatt-hour (mwh), a 35 percent discount compared with the auction’s price cap of 122 reais (US$69.26). The government had expected power to be sold just below 100 reais (US$56.77) per mwh. Consorcio Madeira Energia includes Furnas, Odebrecht Investimentos em Infra-estrutura Ltda., Construtora Norberto Odebrecht S.A., Andrade Gutierrez Participacoes S/A, Cemig Geracao e Transmissao S/A, and Fundo de Investimentos e Participacoes Amazonia Energia (formed by banks Banif and Santander).

Court: Resume work at 900-mw La Parota

A Mexican federal court lifted an order suspending construction of the 900-mw La Parota hydroelectric project in Guerrero State. Judge Livia Larumbe Radilla lifted her own restraining order against the project in November 2007 after verifying that the project would not affect the interests of the indigenous Cacahuatepec community. Larumbe examined whether it was legal for the government to grant national utility Comision Federal de Electricidad permission to use Papagayo River water for the dam and cut down nearby trees. The court order had suspended project work until that determination was made.

HydroOGK completes merger with 20 units

Russia’s HydroOGK reported the completion of its merger with 20 subsidiaries and dependent companies, completing the first phase of consolidation of the world’s second largest hydroelectric generator. HydroOGK said January 10 that Russian markets discontinued trading of the subsidiaries in late December as Russia’s securities regulator, Federal Service for Financial Markets, registered additional share issues of HydroOGK for the purpose of the merger. The company issued 39.19 billion shares valued at 1 ruble (4.1 US cents) each. Shares in HydroOGK started trading on Russian stock exchanges in February. HydroOGK, which is due to receive 100 billion rubles (US$4.04 billion) in proceeds from the sale of government stakes in other power generators, is consolidating about 50 power stations totaling 24,000 mw, second only to Canada’s Hydro-Québec. The company, which is 98 percent owned by former electricity monopoly Unified Energy Systems (UES), with the remainder owned by the state, will have a small free float as a result of consolidation. HydroOGK, which produces 20 percent of Russia’s power, plans to double its generating capacity by 2020, bringing on line 22,200 mw, mainly in the Russian Far East, Siberia, and the Caucasus.

Sime Darby cleared to own 2,400-mw Bakun

Malaysian conglomerate Sime Darby received Malaysian government approval to buy a 60 percent stake in both the 2,400-mw Bakun hydroelectric project and a 700-kilometer undersea transmission line to link Bakun to the mainland. Sime Darby received approval to buy a 60 percent stake in the Bakun project developer, Sarawak Hidro Sdn Bhd, and said it planned to begin stake acquisition talks. Sarawak Hidro is expected to complete the hydro project in 2010 in Malaysia’s Sarawak State on Borneo Island.

Zambia to begin Kariba North Expansion

China’s Sinohydro Corp. is to begin construction in early 2008 on a 360-mw expansion of the 600-mw Kariba North hydroelectric project on the Zambezi River in Zambia. Zambia Electricity Supply Corp. Managing Director Rhonie Sisala said the Export-Import Bank of China agreed to provide 85 percent of the total cost of US$243 million for the expansion. The China Export-Import Bank previously agreed to lend Zambia another US$300 million for renovation of the existing 600-mw Kariba North project. Zambia has been upgrading Kariba North for several years. When complete, the original plant’s capacity will have increased by 20 percent to 720 mw.

Brazil sets auction for 3,300-mw Jirau

Brazilian officials scheduled a concession auction May 9 for the 3,300-mw Jirau hydroelectric project on the Madeira River in Brazil’s Amazon region. The Ministerio de Minas e Energia, regulator Agencia Nacional de Energia Eletrica, and audit court TCU are to prepare the auction order in time for May 9, Business News Americas reported. The government also plans to auction concessions in July to build five hydro plants on the Parnaiba River in northeastern Brazil that would total 430 mw. Another concession auction is expected in 2011 for a giant hydroelectric project site recently discovered in Brazil’s Amazon region. Surveys have confirmed the hydropower potential of the 9,080-mw Sao Luis project proposed for the Tapajos River, an Amazon River tributary in northern Para State.

Turkey-Iran deal includes 10,000 mw of hydro

Officials of Turkey and Iran signed a US$1.5 billion energy accord to include the joint construction of a 10,000-mw hydroelectric project. The agreement focuses primarily on upgrading existing transmission lines and construction of a new line between the adjoining nations. The agreement also includes construction of three natural gas-fired power stations totaling 6,000 mw and a 10,000-mw hydropower station. Turkish Energy Minister Hilmi Guler said Turkish contractors would build the hydropower station. He said the public sector would conduct the work on the transmission lines, while the private sector would carry out construction of the power stations and dams.

Verbund seeks new plants, drops Russian deal

Austria hydropower utility Verbund plans to raise net profit by 10 percent a year in coming years and invest heavily in new power plants. Chief Executive Michael Pistauer said the majority government-owned utility earmarked 6.7 billion euros (US$10 billion) to spend on new power plants up to 2015, mostly in the Balkans, Italy, and France. Its international business could be spun off and listed in a few years, he said. Verbund has grown rapidly in Austria, where it operates 100 hydroelectric plants along the Danube and on Alpine reservoirs, and has begun to enter the end-customer market after failing repeatedly to take over Austrian rivals owned by regional governments. However, Pistauer said Verbund decided the risk was too great to build a 1.9 billion euro (US$2.8 billion) hydropower plant with Russian hydro utility HydroOGK. Verbund and HydroOGK signed a memorandum of understanding in 2006 on cooperating to develop hydro projects in Russia.

Mozambique pays for 2,040-mw Cahora Bassa

With funding from French and Portuguese banks, the government of Mozambique paid a US$700 million debt to Portugal and took control of the 2,040-mw Cahora Bassa hydroelectric project on the Zambezi River. Mozambique previously paid Portugal US$250 million. In a nationally broadcast ceremony, Mozambique paid the remaining US$700 million to Portugal, which had owned 82 percent of the project, to Mozambique’s 18 percent. Completion of the deal gives Mozambique 85 percent of Cahora Bassa and Portugal 15 percent. Mozambique President Armando Guebuza says his government will intensify efforts to attract foreign investment in 2008, including the planned upgrade and expansion of Cahora Bassa.

Pakistan advances 969-mw Neelum-Jhelum

Pakistan’s Federal Cabinet approved construction of the 969-mw Neelum-Jhelum hydroelectric project at a revised cost of 128.4 billion rupees (US$2.1 billion). The government said the approval clears the way for construction of the project on the Neelum and Jhelum rivers in the Azad Jammu Kashmir Region. The revised cost included a foreign exchange component of 46.5 billion rupees (US$761 million). The project envisages diverting the Neelum at Nosairi in Azad Jammu Kashmir and transporting the water to the power station through a 47-kilometer tunnel. Work is to be completed in eight years. China Gezhouba Group Corp. and China National Machinery & Equipment Import & Export Corp. were successful bidders for civil construction, and mechanical, electrical, and hydraulic steel works.

Financing closes for Uganda’s 250-mw Bujagali

Development partners Sithe Global Power LLC and Industrial Promotion Services (Kenya) Ltd. (IPS) announced financial closing in December 2007 of a US$682 million construction debt facility for the 250-mw Bujagali hydroelectric project, being built on the Victoria Nile River in Uganda. Sithe Global of the United States and IPS, an affiliate of the Aga Khan Fund for African Development, are owners of Bujagali Energy Ltd., the hydro project’s development consortium. The US$799 million Bujagali project is being undertaken as a public-private partnership between the government of Uganda and state-owned Uganda Electricity Transmission Co. Ltd. on one hand, and Sithe Global and IPS on the other.

Tajikistan opens 670-mw Sangtuda 1

Tajikistan officials opened the Russian-built 670-mw Sangtuda 1 hydroelectric project January 20, hailing it as a step toward solving Tajikistan’s energy crisis. Speaking at the opening ceremony of Sangtuda 1, Tajik President Imomali Rakhmon said the project’s additional capacity would help avoid crises such as the current coldest winter in decades. “This year’s winter has proved the necessity of solving Tajikistan’s energy problems as quickly as possible,” Rakhmon said. The US$500 million plant, its construction financed by Russian electricity company Unified Energy Systems, is due to reach full capacity of 2.7 million kwh later in 2008. The Leningradsky Metallichesky Zavod unit of Russian hydro equipment supplier Power Machines is building four of the turbine-generators for Sangtuda 1 under a contract valued at US$100 million.